The Four Biggest Debt Lies People Tell Themselves

Denial isn’t just a river in Egypt when it comes to finances and it’s one of the biggest factors when it comes to debt. Human beings lie, it’s one of the survival instincts that allowed our ancestors to survive long enough to reproduce. In personal finance lying to yourself can become a destructive habit that hobbles your savings and keeps many in a perpetual state of debt.

When people look back on it generations from now, I believe the entire concept of the debt economy will be seen as one of the greatest scams in financial history. Of course, who knows what that economy of the future will look like? Maybe it will be even worse than it is today, though that seems unlikely. It’s hard to see how the collective “we” could chalk up much more debt than we already have today. For households that carry a credit card balance, the average is $7,879, nearly eight grand!

There has to be some pretty powerful denial at work to run up credit card balances that high, let’s take a look at some of the usual debt lies people tell themselves.

You Need Debt For a Good Credit Score

That’s a big, fat lie there. My wife and I cut up our credit cards long ago, paid off our last mortgage and froze our credit reports. The last time I checked we managed to make it into the 800 club, it’s probably lower now, not that we care. Financial freedom is worth far more than a credit score and if you’re running a balance just because of your credit score, you are buying into the whole debt economy charade.

Everyone Has Some Debt

No, they don’t. Just because misery loves company doesn’t mean everyone is in the club. Statistics on just how many Americans are completely debt free, including credit cards, car loans or leases or a mortgage are hard to come by because no one really wants to study them. Debt free individuals are absolutely no one’s target market. Around forty percent of people have paid off their home mortgage and the number who are debt free beyond that will be substantially lower. Estimates in the range of ten percent are difficult to verify. A similar debt lie is the one that says it’s impossible to be debt free, which is another big, fat lie.

It Was A Really Good Deal

My wife used to be a sucker for this one, until I showed her how retail stores pad suggested retail prices in order to make “sale” prices look better. Getting a good deal on something you don’t need that badly is really no deal at all. The fake sale revelation finally freed my wife and I from the discount trap. Now we buy what we need, when we need it and don’t worry about trying to time sales. Being able to say “no” to what presents itself as a bargain is very liberating.

I’ll Start My Debt Plan Next Month

If you’re being honest with yourself, that’s probably not going to happen. Next month there will be a whole new set of temptations and minor emergencies to put off your debt plan another month. The fact is there will never be a perfect time to get started. Like any difficult journey, getting on the trail can sometimes be the hardest step.

Getting a grip on debt means getting comfortable looking at your spending with an unflinching eye, setting up a budget and paying savings first. It means saying no to impulse buying and fake sale prices and buying what you need, when you need it. Being financially responsible is not fun sometimes but it pays off in the long run.

The Four Biggest Debt Lies People Tell Themselves was last modified: April 14th, 2016 by Chris Poindexter

Chris Poindexter is a freelance journalist and photographer living in South Florida. He writes for a wide variety of publications on subjects including personal finance, investing, treasure hunting, travel, science and technology. He’s the author of several books, including the wildly popular My House Has Wheels, 10,000 Miles In Town and The Recovery and Marine Salvage, Inc. fiction series. He can be reached at chris@chrispoindexter.com.